SEC Filing Summary: Washington Real Estate Investment Trust (WRIT)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2001, for Washington Real Estate Investment Trust (WRIT), a Maryland REIT. The Trust operates income-producing real estate in the Washington-Baltimore region across four segments: Office Buildings, Industrial Centers, Multifamily Properties, and Retail Centers. As of June 30, 2001, there were 38,328,991 shares of beneficial interest outstanding.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2001 | Six Months Ended June 30, 2001 |
|---|---|---|
| Real Estate Rental Revenue | $37.4 million | $72.7 million |
| Operating Income | $26.7 million | $51.8 million |
| Net Income | $12.4 million | $23.1 million |
| Diluted EPS | $0.33 | $0.63 |
| Cash Flow from Operations | N/A | $37.5 million |
| Total Debt (Mortgage + Notes) | $350.9 million | $350.9 million |
| Cash and Equivalents | $22.4 million | $22.4 million |
| Dividends Paid (YTD) | $0.3325 per share | $0.6450 per share |
Material Changes vs. Prior Period
- Revenue Growth: Rental revenue increased 12.2% ($4.0 million) for the quarter and 11.4% ($7.4 million) for the six months compared to 2000. Growth was driven by acquisitions (One Central Plaza, Wayne Plaza, Courthouse Square) and increased rental rates/occupancy in the core portfolio.
- Operating Income: Increased 12.4% for the quarter and 11.8% for the six months. Office buildings saw a 17.3% revenue increase, while industrial centers saw a 10.9% increase.
- Occupancy Rates: Office occupancy rose to 98.1% (from 97.0%); Industrial occupancy improved to 99.1% (from 96.7%). Multifamily occupancy declined to 94.6% (from 97.2%).
- Expenses: Real estate expenses increased 11.7% for the quarter due to new acquisitions and higher taxes. General and administrative expenses decreased 24% for the quarter due to higher property-level management fees offsetting corporate costs.
- Capital Activity: The Trust acquired properties totaling $46.0 million in the first six months of 2001. It also completed a public share offering in April/May 2001, raising approximately $53.1 million in net proceeds.
Guidance, Outlook, and Risks
- Liquidity: WRIT maintains $75 million in unsecured credit commitments with $0 outstanding as of June 30, 2001. Management believes current resources are sufficient for obligations and future acquisitions.
- Interest Rate Risk: All $350.9 million of outstanding debt is fixed-rate. Management estimates a 200 basis point rate increase would result in less than a 1.5% reduction in earnings.
- Forward-Looking Risks: Potential impacts include economic health of the Washington-Baltimore region, supply of competing properties, inflation, and capital availability for technology/biotech sectors.
- Dividends: The Trust paid dividends of $0.6450 per share for the six months ended June 30, 2001, consistent with its REIT distribution requirements.
Investor Verification Checklist
- Verify the occupancy decline in the Multifamily segment (94.6%) and its impact on future rental rate growth.
- Confirm the utilization of the $53.1 million share offering proceeds, specifically the $43.0 million used to repay acquisition debt for One Central Plaza.
- Review the debt maturity schedule, noting $7.4 million due in 2003 and $26.3 million due in 2005.
- Assess the sustainability of the 12% revenue growth given the significant portion attributed to recent acquisitions rather than organic core portfolio growth.
- Monitor the $75 million credit line availability as a buffer for future capital needs or refinancing.